How to bake ambient occlusion into vertex colors?
Quick overview of the bake process &amp; preview in Blender Render





How to bake the ambient occlusion into vertex colors


Select the object and make sure the object has a vertex color layer assigned in Object Data > Vertex Colors. If not, create one by clicking the plus button.


Navigate to the Render tab > Bake. Select Bake Mode: Ambient Occlusion and Bake to Vertex Color


Select the object and hit Bake




Blender Render material setup to see the vertex colors


Select the object's material and enable these:


Shading > Shadeless


Options > Vertex Color Paint



Switch to viewport shading to Material

Optionally, if you want to see your texture blended with vertex colors, you can go to Texture tab > Influence and set the Blend: Multiply





Cycles material setup to see the vertex colors


To add vertex colors into node tree, use Attribute node with the name corresponding to the object's vertex color layer name (it is named Col by default).
In the example below, you can see a simple shadeless material where vertex colors and an image texture are combined: